NEW YORK (AP) -- Two signs of trouble elsewhere in the world pushed U.S. stocks lower Monday: slowing economic growth in China and a possible hitch in a deal to get Greece the bailout money it needs to avoid a default.
The Dow Jones industrial average fell 14 points to 12,965 in mid-afternoon trading. The Dow closed above 13,000 last week for the first time since May 2008. The Standard & Poor's 500 dropped 5 points to 1,361. The Nasdaq composite index fell 24 to 2,952.
China's premier, Wen Jiabao, lowered China's target rate for economic growth to 7.5 percent from 8 percent, where it has stood for years. That's a negative sign because growth in China has been a key factor shoring up the global economy since the financial crisis of 2008.
With half of the world's steel is consumed in China, the news sent steel company stocks sharply lower. AK Steel Holding Corp. was off 6 percent, while US Steel fell 4 percent.
The lower projection for Chinese growth also hurt stocks of U.S. materials companies that depend on China for profits. Caterpillar, which makes heavy equipment, fell 1.8 percent. Alcoa, the aluminum maker, fell 3.5 percent.
Materials stocks in the S&P 500 fell almost 2 percent, easily the worst-performing industry group. Consumer staples companies climbed 0.3 percent, the only group in the 10 S&P 500 categories to gain.
The Dow fell as much as 93 points in the morning before recouping some of that loss in the afternoon. Some market strategists said it was an overreaction to read too much into China's projection.
"China is still a driver of global growth, even at its slightly reduced pace," said Richard Cripps, chief market strategist at Stifel Nicolaus. "The growth rate is still far better than the U.S. and Europe."
Also weighing on the market were worries that not enough private investors will participate in a bond swap in Greece and accept bonds of lower face value and lower returns.
Trying to reassure world markets, a group representing the private investors said Monday that a dozen banks, insurers and investment funds that hold Greek government bonds will participate. The deadline to participate is Thursday night.
Greece needs private investors to sign on before it gets a second international bailout worth $172 billion. Without the bailout, it could default on its debt later this month and send a shock through the world financial system.
The stock market's losses were limited by some positive news from the U.S. economy. Service companies expanded in February at the fastest pace in a year, helped by a rise in orders and job growth.
The Institute for Supply Management said Monday that its index of non-manufacturing activity rose to 57.3, up from 56.8 in January and the third straight increase. Any reading above 50 indicates expansion.
In recent months, markets have been lifted by signs of improvement in the U.S. economy. U.S. stock indexes have been trading at their highest levels since before the collapse of the Lehman Brothers investment bank in 2008.
Among other stocks making big moves:
— American International Group rose 3.5 percent. AIG will raise $6 billion by selling part of its stake in an Asian insurance company and pay down some of its debt to the U.S. government from a bailout during the financial crisis. AIG owed $50 billion at the end of 2011.
— Computer Sciences was up close to 2 percent after it signed a letter with the British government to deliver health care services there.
— Alpha Natural Resources, a coal producer, fell 6.5 percent after the price of natural gas fell 5 percent due to weak demand for gas in a mild winter.
— Archipelago Learning stock soared 22 percent after the online education company agreed to be bought by Plato Learning for $291 million in cash, helping boost the number of customers.
— US Airways Group fell 4.4 percent after the airline said passenger revenue growth slowed in February, indicating it is having a tough time raising fares and fees to offset climbing oil prices.